TORONTO—In July, the Timken Canada received an ominous phone call from a constable at the Royal Canadian Mounted Police (RCMP), asking about counterfeit bearings.
It turns out the Canada Border Services Agency (CBSA) had intercepted a full pallet of bearings at Toronto’s Pearson International Airport in a shipment from China.
“They sent some photographs of the cartons and the external packaging, and asked if we could determine if they were counterfeit. Unfortunately to the trained eye…the differences can be hard to spot, but the actual cartons looked wrong enough to raise suspicion,” recalled Evan Boere, business development manager at Timken in Mississauga, Ont.
All Timken products come in black and orange packaging with a hologram for counterfeit protection. Boere noted the packaging on the suspect shipment was missing a hologram and the barcoding was wrong.
“Those were the first indications,” he said. “Constable Gill asked if we could do some analysis—there were enough telltale signs—so we sent the bearings to our manufacturing plant in St. Thomas, Ont., that has a lab.”
The bearings conformed to Timken’s standards in terms of dimensions, surface hardness and weight, but because of the scoring marks on the cone raceway, the product was sent to Timken’s metallurgical lab at its Canton, Ohio headquarters for further analysis.
Once they cut it open, it was obvious the bearings weren’t genuine. They were through-hardened and the materials were wrong, Boere explained.
Made in China
Tracking down the perpetrator, however, is challenging.
“That gets a little difficult,” he said. “It’s very difficult to determine the manufacturing source but they came in from China.”
“We have to do it ourselves,” added Daniel Szoch, program manager at Timken in Canton. Szoch heads up the company’s global anti-counterfeiting operations. The authorities in China usually don’t take the lead in these investigations, he explained. The onus is on the manufacturer to track down the guilty party and point the authorities in the right direction. It can be costly and time consuming.
This was the second time in the past year Timken has been notified of counterfeit bearings from China.
“We get a phone call from one of our distributors saying they had unknowingly purchased a bearing from a source they thought was trustworthy,” Boere said. The source was a surplus house.
“We spoke to the principle at the surplus house and he was very good at telling us where he sourced them in China. We tried tracking them down but we weren’t successful,” he added.
“The products were marked as ‘made in the USA’ but they came from China at a really fantastic lead price. It’s interesting with surplus houses because they deal with stuff that comes from all over the world, so I think they tend to turn a blind eye as to whether the product could be counterfeit if the packaging looks close.”
The World Bearing Association has embarked on a mission to educate customs officials around the world about ways to spot counterfeit bearings. In fact, the organization was formed specifically to tackle the problem and has launched the Stop Fake Bearings campaign.
These counterfeits don’t just impact the company’s bottom line; the shoddy performance of these fakes in markets such as automotive can cost people their lives, according to the association.
Boere has conducted education sessions for border officers in Canada. Yet, officials don’t have time to thoroughly check every shipment and even then, fakes would still slip through the cracks, he said.
Scott Lynch, president of the American Bearing Manufacturers Association (ABMA) says Chinese officials have seized 2.2 million bearing products since 2009, and a Customs Seizure in Long Beach, Calif. in 2009 unearthed US$750,000 worth of fakes mimicking four different brands.
Szoch says Timken works with customs officials in each region to determine the flow of their products in and out of the country. “They’ve been more than forthcoming in sharing that kind of information,” he noted.
All bearing manufacturers have been victimized, with the top selling products being copied most often, he added.
Timken plans to improve detection rates by adding an extra layer of security to its packaging. The hologram will include a QR code; the customer can scan the box to determine authenticity.
When asked if Timken is concerned they could be targets of packaging theft, Szoch said the company pays close attention to any scenario where it could happen, but it isn’t likely. The company doesn’t reuse any of its packaging and those in the OEM supply chain purchase directly from the company, Szoch explained.
“This phenomenon has more of an impact on our aftermarket industrial distribution business,” he noted.
All buyers can do is make sure they purchase from authorized distributors and notify the manufacturer directly if they suspect a product is counterfeit.
In that regard, some stakeholders are urging the government to keep counterfeit parts out of the supply chain.
“We understand there are custom measures that exist in other countries that are reasonably effective in detecting counterfeit shipments,” said Ingalill Ostman, senior vice-president, group communications and government relations at the SKF Group, based in Goteborg, Sweden.
“SKF believes Canadian law could be strengthened to better protect the borders and market against counterfeit products.”
Ostman isn’t alone. A June 2012 report from the Canadian Intellectual Property Council, called “Counterfeiting in the Canadian Market: How do we stop it?” says Canadian border enforcement needs to be strengthened. It also called for the creation of an intellectual property crime task force.